Manual Transmittal

Purpose

Background

A revision of the IRM 5.12 chapter has been done in order to consolidate and coordinate like topics, reduce duplication of
content, and provide an overview, cross-references, and contacts.

Material Changes

(1) Move IRM 5.12.2.1 and .2 to IRM 5.12.1.3 and .4

(2) 5.12.1.4(2)(b) (formerly known as IRM 5.12.2.1(1)) changed word "protect"
to "establish"
at the behest of the TAS

(3) The following table provides a cross walk of sections MOVING TO IRM 5.12.1 FROM other 5.12 location(s)

Moving from ____ to IRM 5.12.1

5.12.2.15.12.2.25.12.2.165.12.2.175.12.2.185.12.2.22

5.12.3.11

5.12.6.15.12.6.25.12.6.65.12.6.115.12.6.125.12.6.13Exhibit 5.12.6-1

(4) Former IRM 5.12.2.18, Priority of Certain Other Interests - Advances, Interest and Expenses from the table above was moved to this IRM but then deleted because the material is more fully and accurately addressed in
IRM 5.17.2, Federal Tax Liens which is the legal reference guide for liens.

(5) Former IRM 5.12.2.22, Cost of Living Adjustment from table above was moved to this IRM but then deleted.

(6) The following table provides sections OF IRM 5.12.1 STAYING IN IRM 5.12.1.

Staying in IRM 5.12.1

5.12.1.4

(7) The following table provides a cross walk for sections MOVED FROM IRM 5.12.1 TO their new 5.12 location(s)

Prior IRM content from:

Moving to new location in IRM:

5.12.1.15.12.1.25.12.1.3

5.12.6

(8) IRM 5.12.1.2 added section on Introduction to Liens.

(9) IRM 5.12.1.3 moved to this section Creation and Duration.

(10) IRM 5.12.1.4 moved to this section Purpose and Effect of Filing a Notice of Federal Tax Lien (NFTL). Included in this section are Lien and NFTL Priorities, moved to IRM 5.12.1.4.1 and NFTL Effect on Home, Business, and Credit added as IRM 5.12.1.4.2..

Audience

Effective Date

5.12.1.1
(10-14-2013)Purpose of this IRM

The purpose of this IRM is to provide an introduction to the lien program, cross-references, and contacts.

5.12.1.2
(10-14-2013)Introduction to Liens

Congress, through the Internal Revenue Code (IRC), has provided the IRS a powerful tool allowing the Government to protect
the American taxpaying public's interest in collecting the proper amount of tax revenues. This tool is the Federal tax lien
(FTL) which is sometimes called the "statutory lien"
or "assessment lien"
. At times the lien has been referred to as the "silent"
lien because, while the Service makes the taxpayer aware of the existence of the lien, it does not make the lien's existence
public unless a notice of the lien has been filed. Because the lien arises by operation of law, it is referred to throughout
this IRM Chapter as the statutory lien or simply "lien"
.

A federal tax lien is a claim against property including current and future rights to property. It represents the tax or tax
related debt of an individual or business.

This IRM Section provides a broad outline or road map introducing liens, indicating where lien information can be found in
the IRM 5.12 chapter, where lien information can be found in other IRM chapters, and providing contact points.

The law sections in the United States Code most frequently associated with liens are:

26 USC § 6321: Lien for taxes

26 USC § 6322: Period of lien

26 USC § 6323: Validity and priority against certain persons

26 USC § 6320: Notice and opportunity for hearing upon filing of notice of lien

28 USC § 2410: Actions affecting property on which United States has lien

Title 26 of the United States Code is called the Internal Revenue Code (IRC). The legal cite might be seen referenced in a
variety of ways including: 26 USC § 6321, IRC § 6321, IRC 6321, section 6321, and I.R.C. 6321 with or without the section
symbol. The associated Treasury Regulation are found in the Code of Federal Regulations (CFR) and would be cited as Treas.
Reg. § 301.6321-1 or as 26 CFR § 301.6321-1.

Though it may seem obvious, it is important to understand that a lien is not a levy. Information about levies can be found
in IRM 5.11 and IRM 5.10.

5.12.1.3
(10-14-2013)Creation and Duration

A Federal Tax Lien is created by the statute IRC § 6321 which is why it is said to be created by operation of law. It attaches
to a taxpayer's current and future property and rights to property for the amount of the liability. This is the "statutory"
lien. The following must occur for the statutory lien to arise by operation of law:

An assessment must have been made.

Notice and demand for payment must have been made.

The taxpayer must have neglected or refused to pay.

Once the lien exists it is controlled by IRC § 6322:

Its date of origin becomes the assessment date.

It continues to exist until the liability is satisfied or becomes unenforceable by lapse of time.

5.12.1.4
(10-14-2013)Purpose and Effect of Filing a Notice of Federal Tax Lien (NFTL).

The Notice of Federal Tax Lien is a public notification filed with designated state and local jurisdictions.

The purpose of filing the NFTL publicly is to both

inform certain third parties, typically a purchaser, holder of a security interest, mechanic’s lienor, or judgment lien creditor
of the existence of the statutory lien securing the tax debt, and

establish the Government’s right of priority against these same creditors.

Reminder:

The NFTL is not a negotiating tool and is to be used only in accordance with IRM 5.12 and IRM 5.17.2.

5.12.1.4.1
(10-14-2013)Lien and NFTL Priorities

Lien priorities are determined generally by "the first in time, first in right" rule. Under that rule, the Service relies
on the date of assessment, which is the date the lien arises. However, the Code provides statutory deviations from the general
rule. For some classes of creditors, the federal tax lien will not have priority until the notice of federal tax lien is filed
(See IRC § 6323(a)). For other classes of creditors, the federal tax lien does not have priority even if notice of the federal
tax lien has been filed. These are called the superpriorities. (See IRC § 6323(b).) Lien priorities are fully explained in
IRM 5.17.2, Federal Tax Liens.

Note:

The priority provided with respect to casual sales and small repairs or improvements of residential real property is subject
to cost of living adjustments.

See IRM 5.17.2.6.5.4 and IRM 5.17.2.6.5.7, in the Superpriorities section.

5.12.1.4.2
(10-14-2013)NFTL Effect on Home, Business, and Credit

Because other creditors become aware of the statutory lien and tax liability through the NFTL filing and then must compete
with the lien based on the category of creditor they are, the party named in the NFTL may find their creditworthiness impacted.
It may also impact the ability to get a loan or the financing charges paid to buy a house or a car, get a new credit card,
or sign a lease. That is why it is so important that taxpayers resolve liabilities as quickly as possible, before an NFTL
filing becomes necessary.

5.12.1.5.1
(10-14-2013)IRS Business Units

The majority of Notice of Federal Tax Lien filing and maintenance work is performed by Field Collection, ACS, and Centralized
Lien Processing. Some lien notice filing is also performed by W&I Accounts Management Contact Representatives working collection
issues. These units rely on Counsel as needed to fulfill their responsibilities.

Note:

Also see IRM 5.12.1.8, Educational Videos and Web Sites Associated with the Lien Program for videos and web sites that may be of assistance with lien work.

Additionally, there are two other organizations (Appeals and the Taxpayer Advocate Service) listed in the chart above who
can assist taxpayers with lien issues.

5.12.1.5.2
(10-14-2013)Appeals

The IRS Office of Appeals handles formal appeals through either Collection Due Process (CDP) or the Collection Appeals Program
(CAP). See IRM 5.12.6 for specific lien program appeal instructions or see IRM 5.1.9Collection Appeal Rights for general Collection appeal instructions.

The Appeals' organization manuals related to their work with liens can be found in IRM 8.22 and IRM 8.24 describe Appeals
CDP and CAP procedures relating to notices of Federal tax lien filings.

Appeals' Collection program instructions are found in Publication 1660, Collection Appeal Rights

5.12.1.5.3
(10-14-2013)Taxpayer Advocate Service

Taxpayers often contact the Taxpayer Advocate Service (TAS) when they are attempting to resolve collection issues.

If the taxpayers asks to be referred to the Taxpayer Advocate Service (TAS), or the taxpayer meets TAS criteria and the taxpayer's
issue cannot be resolved the "same day (within 24 hours)", complete Form 911 or e-Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance order) and refer the taxpayer to TAS. See IRM 13.1.7 for more information.

If you are able to resolve and close the TAS issue on the same day as the TAS contact, do not refer the inquiry to TAS.

There will be times that although you cannot completely resolve the issue within 24 hours, if you have taken steps within
24 hours to resolve the taxpayer's issue, these cases also meet the definition of "same day." Do not refer these cases to
TAS unless the taxpayer asks to be transferred to TAS.

See Delegation Order 11-2 found in IRM 1.2.49.3, Authority to Permit Disclosure of Tax Information and to Permit Testimony or the Production of Documents, and IRM Exhibit 1.2.49-2 for a list of employees authorized to disclose information concerning the amount of the outstanding
obligation secured by the NFTL. Disclosure may be made to any person who demonstrates that he/she possesses a right or intends
to obtain right in the property. See also IRM 11. 3.11.10, Disclosure of Amount of Outstanding Lien.

Employees listed in Delegation Order 11-2 have the authority to determine whether or not to disclose the requested information
under the authority of IRC 6103(k)(2).

Any person, other than the taxpayer or their designee, desiring information as to the amount of the outstanding obligation
in order to decide whether to acquire the property covered by the NFTL (when a NFTL has been filed) must submit a written
request stating the reasons the information is desired and properly identifying the NFTL in question. A prospective purchaser
should attach a copy of the sales contract or a lender loan application.

The requested information will be furnished using Letter 1038 (DO), Response to Inquiries About Release of Federal Tax Lien.

5.12.1.10.1
(10-14-2013)Disclosure to Escrow and Title Companies

When a completed Form 8821, Tax Information Authorization, is provided, employees designated the authority to execute Forms 668(Y)(c), may disclose the amount of the outstanding obligation
secured by the NFTLto any individual or entity listed as an appointee on the completed Form 8821. For example, an escrow agent,
title company, lending institution, etc. may be listed as an appointee on a completed Form 8821. See IRC § 6103(c). Authorities
for lien related activities are found in IRM 1.2.44.5, Delegation Order 5-4, Federal Tax Lien Certificates.

The Form 8821 must be completed prior to the taxpayer signing it and should authorize disclosure of lien information on the
specific piece of property for sale.

The following information should be provided:

The taxpayer’s name, address, taxpayer identification number, or any combination of these three.

The information to be disclosed, for example, the amount shown on the NFTL, including the address of the real property subject
to the filed NFTL.

The identity of the company or escrow agent authorized to receive the information. It is not necessary to name an individual.

The taxpayer’s signature and date.

It is not necessary to specify tax type or tax year.

Taxpayers may also authorize disclosure telephonically. Verify the taxpayer’s identity using approved functional procedures
and document the information in writing.

The information to be disclosed; for example, the amount shown on the NFTL, including the address of the property subject
to the NFTL.

The identity of the escrow agent or title company authorized to receive the information.

The date of the consent. For example, "John Doe on 06/05/2012 consents to disclose the payoff amount of all filed NFTLs on
134 Maple Boulevard to XYZ Title."

Disclosure of lien information not subject to a filed NFTL should not occur without obtaining the taxpayer’s authorization
either orally or in writing. Obtain and document the information referred to (4) above.

In situations where the taxpayer’s authorization cannot be obtained, seek advice from Area Counsel; for example, taxpayer
is medically incapacitated, is on vacation outside the U.S. and cannot be reached, etc.

5.12.1.11
(10-14-2013)Lien Notices and Certificates

This section identifies the various lien notices and certificates associated with the creation of Notices of Federal Tax Lien
and their maintenance. The documents are grouped by topic.

5.12.1.11.1
(10-14-2013)Notice of Federal Tax Lien Types

The following table contains the documents used to create Federal Tax Lien Notices associated with IRC § 6323 and IRC § 6324:

Title

Number

IRM Location

Generated & Maintained by ALS

Requested through

Notice of Federal Tax Lien

668Y

IRM 5.12.7

yes

ICSACSForm 12636

Notice of Federal Tax Lien (Nominee)

668Y(Annotated)

IRM 5.12.7

SLID only

Advisory and Area Counsel manually

Notice of Federal Tax Lien (Alter Ego Lien)

668Y(Annotated)

IRM 5.12.7

yes

Advisory and Area Counsel

Amended Notice of Federal Tax Lien

Amended 668Y

IRM 5.12.7

yes

Form 13809

Notice of Federal Tax Lien Under Internal Revenue Laws (Refile)

668F

RM 5.12.8

yes

ICSForm 12636

Notice of Federal Estate Tax Lien

668H668J

IRM 5.5.8

no

manual process

The following table contains the documents used to withdraw Federal Tax Lien Notices associated with IRC § 6323.

Title

Number

IRM Location

Generated & Maintained by ALS

Requested through

Withdrawal of Filed Notice of Federal Tax Lien

10916

IRM 5.12.9

yes

Form 13794-W

Partial Withdrawal of Filed Notice of Federal Tax Lien

Partial 10916

IRM 5.12.9

yes

Form 13794-W

Withdrawal of Notice of Federal Tax Lien After Release

10916–A

IRM 5.12.9

yes

Form 13794-W

The following table contains the document used to notate a duplication of a Federal Tax Lien Notice associated with IRC §
6323.

Title

Number

IRM Location

Generated & Maintained by ALS

Requested through

Certificate of Duplication of Federal Tax Lien

Letter 2440

IRM 5.12.7

no

manual process

5.12.1.11.2
(10-14-2013)Lien Release Certificates

Whenever a Notice of Federal Tax Lien has been filed and the liability has been satisfied or become unenforceable, a release
document is required to notify creditors of the lien's change in status.

5.12.1.14
(10-14-2013)Management and Responsibility for the Lien Program

Enterprise Collection Strategy's Collection Policy organization has overall responsibility for the lien program and the Automated
Lien System (ALS).

Each individual who prepares or approves lien notices and certificates accepts the responsibility that the review process
encompasses many duties including reviewing the request or manual document for completeness such as ensuring there is name,
address, balance due, and tax period information on each NFTL. The requestor is ultimately responsible to see that the lien
notice or certificate is processed and filed timely, where required.

5.12.1.14.1
(10-14-2013)Centralized Lien Operation Responsibilities

Working with Collection Policy, Centralized Lien Processing is responsible for:

Processing requests for and maintaining Notices of Federal Tax Lien generated by ALS.

Issuing lien certificates related to NFTLs, such as releases and withdrawals, generated by ALS.

Facilitating payment of recording fees to the appropriate recording official.

Administration of the ALS database, including but not limited to, adding and removing users, resolving exception reports,
providing assistance to other functional users.

Responding to written and telephone requests for lien payoffs and releases.

Mailing all documents timely.

Liaison with internal and external stakeholders.

For more information about CLO processing, communication, and quality control responsibilities see IRM 5.19.12.

5.12.1.14.2
(10-14-2013)Managing Work Processed During Dead Cycles

Master file updates its systems during the middle of December through the first week of January, each year. This period is
known as the "dead cycles"
. During this time, master file does not provide Status 12 extracts or DIAL downloads to ALS.

Lien releases can be manually input to ALS during this time.

Document processing will continue in accordance with established time frames.

Certificates of release must be processed within the established 30 day time frame. Therefore, when master file is back on
line, immediate processing must occur, including printing and mailing of certificates of release.

Transaction codes 582 and 360 for work processed during this time period will be posted when master file resumes processing.

5.12.1.15
(10-14-2013)Communicating With Centralized Lien Operation

Field employees may contact the CLO team for their Area for problems with a specific lien notice or certificate. If the problem
is not resolved or if it is a general problem impacting many lien notice or certificate documents, the employee may contact
the Field Office Resource Team (FORT).

Occasionally, the Lien Organization employee will need to refer an issue to the FORT.

The FORT will determine if other functions are involved and, if so, initiate contact.

For assistance with the ALS database on changes such as POD addresses, group numbers, and county/zip code matches, the field
employee should contact the local ICS IQ Analyst who will coordinate the changes with the Lien Policy Analysts or ALS Functional
Coordinator.

When contacting CLO to request assistance with creating and or filing a document, use the charts in IRM 5.12.1.11 above to identify which form to use.

5.12.1.16
(10-14-2013)Field Office Resource Team (FORT)

The FORT acts as a technical resource and liaison for the Lien Processing Units. A staff revenue officer/advisor responds
to employee requests or determines if assistance from some other function is required.

Generally the FORT:

Obtains information on lien issues from field employees, as necessary

Communicates with Headquarters Analysts

Resolves issues with recording offices, if possible

Initiates Contact with area counsel and governmental liaison offices as well as maintaining associated nationwide contact
lists

Responds to questions regarding new procedures

Assists in implementing new or revised procedures

Explains and interprets IRM procedures, when necessary

Provides technical guidance to internal and external customers

Responds to questions from field employees related to centralized lien processing

5.12.1.17
(10-14-2013)Functional Coordinator Responsibilities

The ALS Functional Coordinator is located in the FORT at the Cincinnati Campus. The responsibilities of the ALS Functional
Coordinator include, but are not limited to:

Establishing permissions and menu groups for users.

Generating and providing reports to the appropriate management official.

Updating local files and/or permissions.

Serving as a resource person for users experiencing problems, responding to questions, etc.

Periodically reviewing all ALS permissions to ensure menu accuracy.

Contact the coordinator when you require assistance with the ALS.

Note:

The ALS Coordinator resets the ALS secondary password only. UNIX login passwords are reset through the MITS Help Desk.

For assistance with POD addresses, group numbers, or county/zip code matches, contact the IQA, ICS/Entity Quality Analyst
who will coordinate the changes with the Collection Policy Analyst or ALS Functional Coordinator.

5.12.1.18
(10-14-2013)ALS Permissions

While Collection Policy governs most aspects of the ALS system, the ALS Functional Coordinator ensures permissions are accurate
and current using information provided by functional managers. If there are any questions about access, contact the ALS Functional
Coordinator. Information about ALS permissions can also be found on the following web sites:

Automated Lien System

Automated Lien System Web Site

ALS User Guides

An On-line (OL) 5081 must be approved by the appropriate manager. This is used to request user additions, name changes, or
deletions.

The OL5081 for new users should indicate the types of permissions or capabilities the employee requires; i.e., research, create,
approval, temporary access vs. permanent. Subsequent changes affecting the user's account, with the exception of a name change
or deletion, may be accomplished via e-mail, memorandum, or OL5081 forwarded by the manager or his designee to the functional
coordinator. Functional coordinators names and phone numbers are located on SERP/Automated Lien System, Who/Where.

Note:

Deleting employees from ALS should not occur without the functional managers approval, including those received from systems
administrators.

Requests to have a UNIX login reset will be made through the MITS Help Desk. For those users with increased permissions on
ALS, ask that your secondary password reset be sent to the functional coordinator by secure e-mail and that the secure email
include the user's name and ALS login.

Changes affecting the user's account, such as requests for additional permissions or removal of permissions, will be submitted
via OL5081 after approval by the manager or his designee.

Note:

Deleting employees from ALS, require the functional manager′s approval including those requests received from systems administrators.

CLO is responsible for updates to user profiles. Passwords are generally responded to within three (3) days of request receipt.

The functional coordinator works with the employee's manager and/or the Policy Lien Program Analyst, when necessary, to ensure
proper permissions are given. See IRM Exhibit 5.12.1-1, ALS Permissions Chart

Note:

When removing or requesting employee permissions, provide the following employee information:

function, i.e., MOIC, COIC, CIO, etc.,

mailing address,

job title,

telephone number, and

employee identification number.

Use the OL5081 process to remove retired or resigned employees from the database immediately upon notification.

5.12.1.19
(10-14-2013)Contacting Recording Officials

CLO is the contact point with recording officials and they have been instructed to contact CLO if they have a complaint with
the Service.

CLO may take any or all the following actions:

Explain the Service's position and attempt to resolve the issue.

Document any conversations and also retain any correspondence received from the official.

Decide on a list of actions to be taken to resolve the issue.

Initiate corrective actions if you determine that established policies or procedures have not been followed.

Contact the employee who originated or requested a lien document filing.

Contact area counsel and/or the local governmental liaison staff to determine if policies or practices have been established.

Contact the recording official and outline our procedures and any code or regulation requirements.

If Collection Policy lien analysts are contacted, they along with SBSE Counsel, will determine further appropriate corrective
actions.

If it is determined that procedural changes are required, initiate a systems change request and submit to Headquarters for
approval.

Request interim guidance, if necessary.

If a recorder contacts a revenue officer, the revenue officer should answer the question if they are able to but also the
revenue officer should direct the recorder to CLO and inform CLO of the conversation and the recorder's concern so that it
may be addressed. CLO is in the best position to recognize if the concern is a one-time situation or if there are multiple
recorders with concerns on the same topic.

Exhibit 5.12.1-1
ALS Permissions Chart

ALS access options have been established for the following employees, including affiliated tax examiners, clerks and group
secretaries. Permissions must be approved by managers and may be altered to meet specific employee needs.